WEBVTT - P&L: Chipotle Has Lost Its Way 0:00:04.760 --> 0:00:08.080 Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 0:00:08.119 --> 0:00:11.200 Along with my co host Lisa Abramowitz. Each day we 0:00:11.280 --> 0:00:14.480 bring you the most important, noteworthy, and useful interviews for 0:00:14.520 --> 0:00:16.880 you and your money, whether at the grocery store or 0:00:16.920 --> 0:00:20.680 the trading floor. Find the Bloomberg P L Podcast on iTunes, 0:00:20.840 --> 0:00:30.400 SoundCloud and at Bloomberg dot com. Investing in the retail 0:00:30.480 --> 0:00:34.040 market tricky, well, ask Scott rothbort. He is the president 0:00:34.040 --> 0:00:37.360 of Lakeview Asset Management. He joins us now and Scott, 0:00:37.440 --> 0:00:39.959 you've been a veteran coming on the program to give 0:00:40.000 --> 0:00:42.879 us your thoughts about the retail industry, the restaurant industry 0:00:42.880 --> 0:00:44.800 and so on. But well, I noticed that a lot 0:00:44.800 --> 0:00:47.680 of it has to do obviously with the consumer. And 0:00:48.240 --> 0:00:50.040 let's start off. Where do you think right now the 0:00:50.040 --> 0:00:53.920 consumers spending money and not spending money visa these these 0:00:53.960 --> 0:00:56.720 areas of the market. Well, I think the consumers spending 0:00:56.760 --> 0:01:01.360 money on a lot of household items. I think finally, 0:01:01.400 --> 0:01:06.039 consumers are after many years, are buying houses, fixing up houses. Look, 0:01:06.080 --> 0:01:08.560 you know they took a terrible hit in two thousand 0:01:08.600 --> 0:01:11.280 and two. A lot of people were displaced from their houses. 0:01:12.000 --> 0:01:14.480 But the market is coming back and people starting to 0:01:14.880 --> 0:01:21.399 buy durable goods, washing machines. Um. There they have been 0:01:21.400 --> 0:01:23.840 buying cars for all. I think that's that's beginning to 0:01:23.920 --> 0:01:27.720 kind of you know. Uh. And in terms of the 0:01:27.800 --> 0:01:31.400 surgeon in the purchase of of those items, the one 0:01:31.560 --> 0:01:34.279 the one area that that they continued to stay away 0:01:34.319 --> 0:01:40.759 from his apparel and and that is really been boggling 0:01:40.880 --> 0:01:44.280 a lot of investors and analysts because the apparel market 0:01:44.319 --> 0:01:50.120 continues to be UM, very difficult to invest in. UM. 0:01:50.160 --> 0:01:52.560 And of course what what invest what? What? What the 0:01:52.600 --> 0:01:57.720 consumers continues to invest in? Are these electronic gadgets, um, 0:01:57.800 --> 0:02:03.640 whether it's games, or it's smartphones or tablets. Uh. But 0:02:03.800 --> 0:02:06.200 wearables is a big market that is only going to 0:02:06.320 --> 0:02:11.840 expand in time. So UM, you invest money on behalf 0:02:11.880 --> 0:02:15.480 of wealthy individuals. You also are a professor at Seton 0:02:15.520 --> 0:02:20.480 Hall University, UM, looking at this environment. How do you 0:02:20.520 --> 0:02:24.120 determine where the opportunities are when there's such a macro 0:02:25.320 --> 0:02:29.000 overlay on this, not only from the consumer spending standpoint, 0:02:29.000 --> 0:02:32.800 but also from technological advancements. And how how quickly some 0:02:32.880 --> 0:02:35.320 of these even retailers have to catch up. Right, Well, 0:02:35.720 --> 0:02:38.200 there's a lot of disruptive events that are taking place 0:02:38.240 --> 0:02:41.560 in the retail markets. Okay, probably the one that people 0:02:41.560 --> 0:02:45.560 are most familiar with is online. Amazon is probably the 0:02:45.560 --> 0:02:51.320 most DISRUPTI development versus Walmart dot Com, Yes, versus everyone 0:02:52.880 --> 0:02:56.760 today Warren Buffett, you know, exiting more of his Walmart 0:02:56.840 --> 0:03:02.840 steak and it makes sense. Um, look I by Walmart. Uh, 0:03:03.040 --> 0:03:05.400 you know, I I look at Walmart for the dividend. 0:03:05.520 --> 0:03:07.240 I might buy it if it came down a little 0:03:07.240 --> 0:03:10.840 bit for our dividend strategy, because it meets some of 0:03:10.880 --> 0:03:12.799 the criteria for our different strategy in terms of growth. 0:03:12.919 --> 0:03:15.760 Is no growth in Walmart. Um. So, so we have 0:03:15.800 --> 0:03:18.320 Amazon is one of the disrupt dividend just a fair 0:03:18.600 --> 0:03:21.360 two point percent prices seventy bucks a share, right, yes, 0:03:21.400 --> 0:03:24.359 and and and and I'd rather see that dividend close 0:03:24.440 --> 0:03:26.480 to three percent, but a two point percent it's beating 0:03:26.480 --> 0:03:29.359 the SNP average divent which is just around two percent, 0:03:29.400 --> 0:03:31.880 maybe even slightly less than that right now. Although you 0:03:32.000 --> 0:03:34.800 have treasure yields rising, So if you just want the dividend, 0:03:34.840 --> 0:03:36.800 you can just invest in a tenure treasury and get 0:03:36.800 --> 0:03:39.280 three percent. You could, but then you won't get the 0:03:39.320 --> 0:03:42.320 benefit of economic growth. Um. And if you invest in 0:03:42.560 --> 0:03:44.680 the tenure treasure, you'll be locked into that for the 0:03:44.720 --> 0:03:47.360 next ten years. And if you need to take your 0:03:47.360 --> 0:03:49.680 money out of that treasury's interest rates rise, you're gonna 0:03:49.680 --> 0:03:52.040 wind up as a lot of people are learning that 0:03:52.080 --> 0:03:54.760 the price of bonds can go down. All right, So 0:03:54.840 --> 0:03:57.280 let's go some names. All right, let's go through some names. Right, 0:03:57.320 --> 0:03:59.160 So Walmart you like for the dividend? Who else? Let's 0:03:59.200 --> 0:04:03.960 go to I was thinking Sonic years of the three 0:04:04.040 --> 0:04:09.040 years I think of that. That's that's okay. So yeah, 0:04:09.680 --> 0:04:13.200 um look, you know we we we run a restaurant portfolio. Um, 0:04:13.360 --> 0:04:15.520 the name that always comes up is Chipalti. What's going 0:04:15.560 --> 0:04:18.400 on with what happened? But you know Chipalte has lost 0:04:18.440 --> 0:04:21.720 its way. Um I put Chipaldi in in in in 0:04:21.080 --> 0:04:24.520 the penalty box. After they had all these problems in 0:04:24.600 --> 0:04:27.720 terms of uh, you know, the diseases that people were 0:04:27.720 --> 0:04:30.359 getting but eating there, but and and and the CEO 0:04:30.480 --> 0:04:33.279 came out yesterday and said, look, we're just not providing 0:04:33.680 --> 0:04:37.320 the type of service that is consummate with what people 0:04:37.320 --> 0:04:40.000 are expecting from us. But this is the company that's 0:04:40.040 --> 0:04:42.080 lost its way. Now I'm gonna be very cynical with him. 0:04:42.120 --> 0:04:48.359 About to say stocks down's going lower? Right? Um? I 0:04:48.360 --> 0:04:51.799 mean you know they're they're they're starting to develop these 0:04:51.920 --> 0:04:56.560 smaller concepts like shop House, which is an Asian fusion concept, 0:04:57.080 --> 0:05:00.280 a pizzeria concept. Uh. And now they're gonna going to 0:05:00.360 --> 0:05:04.960 the burger market. Um. And I'm telling to myself, why, um, 0:05:05.040 --> 0:05:06.839 why are they doing all this? Why are you going 0:05:06.880 --> 0:05:08.800 into the pizza and burger market, two of the most 0:05:09.200 --> 0:05:12.720 saturated markets out there. You know, what what edge does 0:05:12.800 --> 0:05:14.720 chappolt they have? And in the meantime, I look at 0:05:14.920 --> 0:05:18.800 the Chapulti restaurants itself, and the menu hasn't changed in years. 0:05:19.080 --> 0:05:21.880 You know, Pim and I we've talked about McDonald's at nauseam. 0:05:21.920 --> 0:05:25.240 I think, and what helped McDonald's from two thousand and 0:05:25.320 --> 0:05:27.800 three to two thousand and thirteen was that they changed 0:05:27.839 --> 0:05:30.720 the menu. They didn't mind taking with what they did 0:05:30.760 --> 0:05:33.760 the McCafe and then they're even now trying to retransition 0:05:33.839 --> 0:05:37.640 the roll it out. It's independent like. But but I 0:05:37.680 --> 0:05:40.560 think Chapolty, um, they need to take a second look. 0:05:40.920 --> 0:05:44.640 And I know that that they talked about food with integrity, 0:05:44.680 --> 0:05:48.240 But the problem with Chapulti is that, um that's coming 0:05:48.800 --> 0:05:51.680 around to haunt them right now. Um, one of the 0:05:51.680 --> 0:05:54.760 fastest growing menu items if you go to restaurants UM 0:05:54.920 --> 0:05:57.560 is fish tacos, so I said a long time ago 0:05:57.640 --> 0:05:59.640 on on this program. As a matter of fact, you 0:05:59.640 --> 0:06:04.120 know what all for a fish. So for Chipotle, the 0:06:04.120 --> 0:06:09.400 fish tackle will be the egg McMuffin for McDonald. Scott Rothbert, 0:06:09.400 --> 0:06:11.520 thank you so much for being with us. Scott Rothbert, 0:06:11.560 --> 0:06:26.080 President and founder of Lakeview Asset Management, uh PIM FOX. 0:06:26.240 --> 0:06:29.040 We have been talking a lot today about the drop 0:06:29.120 --> 0:06:33.000 in biotech shares, the end of the uh fervor in 0:06:33.000 --> 0:06:36.520 the wake of Donald Trump's election as the next US president. 0:06:37.000 --> 0:06:40.279 Somebody who has been predicting this for weeks now is 0:06:40.320 --> 0:06:43.120 Max Neeson of Bloomberg Gadfly, and we are lucky enough 0:06:43.160 --> 0:06:45.279 to have him in studio with us to talk a 0:06:45.279 --> 0:06:48.520 little bit about whether this is just the beginning of 0:06:48.560 --> 0:06:51.000 a sell off or or whether you know what we 0:06:51.040 --> 0:06:53.000 can glean from today. So Max, thanks so much for 0:06:53.080 --> 0:06:55.200 joining us. So can you just set the set the 0:06:55.200 --> 0:06:59.240 backdrop here? It was a tweet by Trump. Yeah, of course, 0:06:59.400 --> 0:07:01.200 thanks so much for having me. So what happened is. 0:07:01.400 --> 0:07:04.760 In an interview with Time, Trump was quoted as saying 0:07:04.920 --> 0:07:07.599 I'm going to bring down drug prices. I don't like 0:07:07.720 --> 0:07:10.680 what's happened with drug prices. So I think this is 0:07:10.720 --> 0:07:13.840 really a bit of a return to reality for the sector, 0:07:14.200 --> 0:07:16.200 which had something of a rally in the aftermath of 0:07:16.200 --> 0:07:20.280 Trump selection. There's kind of this blanket assumption that Trump 0:07:20.360 --> 0:07:24.080 is better than Clinton. Um more Leanian drug pricing policy, 0:07:24.440 --> 0:07:28.480 fewer nasty tweets about price hikes. They kind of expected. 0:07:28.560 --> 0:07:31.840 Trump to government is a kind of adoption of Republican Well, 0:07:31.920 --> 0:07:34.640 lo and behold, he's a populist. People hate high drug 0:07:34.680 --> 0:07:38.760 prices and they hate drug price hikes, so it's not 0:07:38.840 --> 0:07:41.480 all that surprising to me that he would kind of 0:07:41.520 --> 0:07:44.240 pick up on this as an issue to kind of 0:07:44.640 --> 0:07:48.600 make a run at Fiser down two and a half percent, 0:07:48.800 --> 0:07:51.640 ab Vied down three and a half percent, Bristol Myers 0:07:51.680 --> 0:07:55.640 squib down two and a half percent, Eli Lily down 0:07:55.680 --> 0:07:58.200 one and a half. I could keep going Mark down 0:07:58.280 --> 0:08:03.920 to Johnson and Johnson down. Is this a buying opportunity? Um, 0:08:04.000 --> 0:08:07.080 you know, I'm not sure that it is, because even 0:08:07.120 --> 0:08:10.280 those big names that you mentioned, well, they haven't done 0:08:10.280 --> 0:08:12.680 the sort of extreme price hiking that you saw from 0:08:13.040 --> 0:08:16.240 kind of more notorious form firms like Valiant, they do 0:08:16.520 --> 0:08:20.240 to some extent rely on your kind of annual bi 0:08:20.320 --> 0:08:23.400 annual ten or more percent price hikes on some of 0:08:23.440 --> 0:08:26.000 their older drugs as they try to kind of fill 0:08:26.000 --> 0:08:29.960 in the gaps in their research pipelines. So there's kind 0:08:29.960 --> 0:08:33.760 of a fundamental drug pressure drug pricing pressure even beyond 0:08:33.880 --> 0:08:37.440 what you're seeing from you know, rhetorically or potentially on 0:08:37.480 --> 0:08:40.679 the policy side, as a pharmacy benefit managers get more 0:08:40.720 --> 0:08:45.760 aggressive about leavering competition and negotiating price prices down on drugs, 0:08:45.800 --> 0:08:48.360 so that there's really fundamental pressure, it's not just noise. 0:08:48.440 --> 0:08:51.800 I think President elect Trump is one thing, and it's 0:08:51.840 --> 0:08:54.599 unclear how much exactly he'll have his hands in the 0:08:54.679 --> 0:08:59.600 day to day policies that govern drug pricing. But we 0:08:59.640 --> 0:09:04.040 do know that Dr Tom Price, Georgia Republican representative is 0:09:04.240 --> 0:09:06.240 going to be the head of the Department of Health 0:09:06.280 --> 0:09:10.040 and Human Services. Barring something unexpected, do we have a 0:09:10.080 --> 0:09:13.280 sense of what his policy is with respect to drug pricing. 0:09:14.000 --> 0:09:15.800 So I think it would be a bit more of 0:09:15.840 --> 0:09:19.040 a surprise if he was particularly aggressive on the policy front. 0:09:19.200 --> 0:09:22.079 And that's really the big question right now. If Trump's 0:09:22.120 --> 0:09:26.400 comments today actually feed through into his administration's policy or 0:09:26.440 --> 0:09:29.720 into how he directs price and UM, you know, it's 0:09:29.760 --> 0:09:33.000 a little bit hard to imagine that the Senate lawmakers 0:09:33.040 --> 0:09:35.520 and Price or something going to reverse course and really 0:09:35.559 --> 0:09:40.160 aggressively start to legislate on drug prices, or for Trump 0:09:40.160 --> 0:09:44.320 to join hands with Senate Democrats to do something about it. 0:09:44.360 --> 0:09:47.160 But I think something that we've really learned over the 0:09:47.200 --> 0:09:49.679 course of this campaign in the past years that it 0:09:49.800 --> 0:09:55.560 doesn't necessarily take concrete policy action to drive down the 0:09:55.600 --> 0:09:58.080 prices of these shares. All it takes is a tweet. 0:09:58.080 --> 0:10:00.760 Also takes is this kind of common and I think 0:10:00.760 --> 0:10:02.920 if we see more of this over the next few years, 0:10:03.200 --> 0:10:05.760 this sense of uncertainty, the sense that you might pop 0:10:05.760 --> 0:10:08.440 off at any point, I don't think it will necessarily 0:10:08.520 --> 0:10:11.800 matter quite so much that that price has not been 0:10:11.840 --> 0:10:14.640 an outspoken critic of drug prices. Um. Is there a 0:10:14.640 --> 0:10:19.440 particular company, biopharmaceutical company that will suffer the most from 0:10:19.600 --> 0:10:23.720 potential restrictions of of drug price heights? Um. I think 0:10:24.360 --> 0:10:28.640 it's pretty broadly based because everyone's exposed. You've got these 0:10:28.640 --> 0:10:32.840 big companies like Fiser that high prices on their older drugs, 0:10:32.920 --> 0:10:35.360 and you've got new companies that are hoping to set 0:10:35.640 --> 0:10:39.200 their prices really high when they actually hit the market. Um. 0:10:39.320 --> 0:10:41.760 And then you've got companies with drugs on the market 0:10:41.760 --> 0:10:45.319 that are seeing the uptake of their drugs restricted basically, 0:10:45.720 --> 0:10:49.160 and the really unfortunate tradeoff when it comes to lowering 0:10:49.200 --> 0:10:51.400 drug prices. If you want to lower prices, you have 0:10:51.440 --> 0:10:53.959 to lower access for people. If everyone can get all 0:10:54.000 --> 0:10:57.160 the drugs they want, um, and you don't put any 0:10:57.160 --> 0:11:00.360 restrictions in place, it becomes really hard to enforce any 0:11:00.480 --> 0:11:02.719 lower drug prices. So I think it's really going to 0:11:02.760 --> 0:11:05.280 be a broad based issue. Can I take you down 0:11:05.360 --> 0:11:08.480 to the health insurance industry for just a second and 0:11:08.559 --> 0:11:11.440 absolute get me, get to get us all your thoughts there, 0:11:11.440 --> 0:11:14.439 because I'm just looking for example, that Humana shares it 0:11:14.480 --> 0:11:17.520 down about one and a quarter percent. Who benefits? Then? 0:11:17.559 --> 0:11:19.680 I mean, is it? Is it the insurance companies? What 0:11:19.720 --> 0:11:24.080 about them? Um? They might see some benefit from lower 0:11:24.120 --> 0:11:26.680 prices if they get a bit more power to push 0:11:26.679 --> 0:11:29.439 for rebates or generally start to pay less for drugs, 0:11:29.480 --> 0:11:32.160 that's good. But in a broader sense for insurers, I 0:11:32.200 --> 0:11:34.240 think this is just a This is a case where 0:11:34.240 --> 0:11:36.360 it might be a buying opportunities to general sell off 0:11:36.360 --> 0:11:39.520 in healthcare stalks. Nothing in particular that would indicate that 0:11:39.880 --> 0:11:43.160 this has any negative read through to insures um. You know, Max, 0:11:43.280 --> 0:11:46.040 something that you were talking about, the fact that shares 0:11:46.080 --> 0:11:50.439 would drop so much and so uniformly on one Twitter 0:11:50.520 --> 0:11:54.280 post is indicative in and of itself, and I think 0:11:54.280 --> 0:11:56.680 that that's an important point. I mean, biotech was accused 0:11:57.160 --> 0:11:59.840 back in two thousand fifteen of being in a bubble? 0:12:00.040 --> 0:12:04.640 Have the FED actually naming the biotech industry specifically? It 0:12:04.679 --> 0:12:07.480 has come down substantially since then, But does this sort 0:12:07.520 --> 0:12:11.199 of underscore how difficult it is to really place a 0:12:11.320 --> 0:12:13.280 value on some of these companies and how that's a 0:12:13.320 --> 0:12:17.280 problem for stock investors. I mean, it couldn't possibly be 0:12:17.400 --> 0:12:19.320 more difficult that. That's what's so much fun about the 0:12:19.400 --> 0:12:22.280 sector that there there's such a wide variety of things. 0:12:22.280 --> 0:12:24.720 I mean, you're you have companies they're placing you know, 0:12:24.800 --> 0:12:27.920 they're completely binary propositions. The trial is going to read 0:12:27.920 --> 0:12:30.719 out or won't. The drug will be commercially successful or 0:12:30.760 --> 0:12:33.840 you won't. And you're really making your best guests because 0:12:34.200 --> 0:12:37.920 you know, unless you're a trained scientists with particular insight 0:12:37.960 --> 0:12:42.000 into a company's drug candidate. You know, you're you're really 0:12:42.080 --> 0:12:44.679 kind of making a broadcast. So it's it's really risking 0:12:44.760 --> 0:12:47.280 a bet on the sector. It's just such a kind 0:12:47.280 --> 0:12:49.560 of a risk on move that you know, we we 0:12:49.600 --> 0:12:51.280 think this is gonna go well, or there's gonna be 0:12:51.280 --> 0:12:53.600 a broad policy which it's gonna help these things. So 0:12:53.679 --> 0:12:57.920 anything negative um really has a disproportionate effect. And I 0:12:57.920 --> 0:12:59.920 think we're seeing that today and I've seen that through 0:13:00.000 --> 0:13:02.920 at the year. Any any hope for these investors, I mean, 0:13:03.080 --> 0:13:06.319 just get out now. I think there is some hope 0:13:06.360 --> 0:13:09.440 that you know, this is probably a bit of you know, 0:13:09.840 --> 0:13:13.679 you know, so this thing we thought was, yeah, that 0:13:13.760 --> 0:13:15.400 the GOP was gonna you know, the Trump and the 0:13:15.400 --> 0:13:17.880 GUP we're gonna be way more friendly. Now it might not. 0:13:18.160 --> 0:13:20.880 Everyone kind of panics, but it might um in the 0:13:21.200 --> 0:13:24.319 Great Trunk tradition be be all words and no actions. 0:13:24.400 --> 0:13:27.480 So that's something definitely to watch out for. And if 0:13:27.480 --> 0:13:30.120 you're an optimist to maybe bet on well. And also 0:13:30.240 --> 0:13:33.960 if you're a chief executive, just be aware that you're 0:13:34.000 --> 0:13:35.920 going to be kept on your toes. I guess with 0:13:36.640 --> 0:13:40.000 this barrage of communication via tweet. Yeah, and then as 0:13:40.320 --> 0:13:44.280 biotech index is down more than since the peak last 0:13:44.400 --> 0:13:49.600 year on July fifteen. Something to note, Max Neeson, thanks 0:13:49.679 --> 0:13:51.600 very much for coming in and sharing all your knowledge 0:13:51.640 --> 0:13:54.599 with as always some pleasure. Max Neison expert when it 0:13:54.679 --> 0:13:57.960 comes to pharmaceuticals, healthcare and all things science from us 0:13:58.000 --> 0:14:13.000 here at Bloomberg. Taking a look. In North Dakota, there's 0:14:13.040 --> 0:14:17.480 been an ongoing confrontation between protesters and law enforcement over 0:14:17.640 --> 0:14:21.920 the Dakota Access Pipeline. Sunday, the U. S. Army Corps 0:14:21.920 --> 0:14:25.320 of Engineers, the direction of Obama and his administration. President 0:14:25.400 --> 0:14:29.080 Obama said that it would refuse to grant the final 0:14:29.200 --> 0:14:32.400 permit needed to complete the three point eight billion dollar project. 0:14:32.600 --> 0:14:35.040 I want to bring in Brandon Barnes. He's senior litigation 0:14:35.080 --> 0:14:38.880 analyst for Energy at Bloomberg Intelligence, coming to us from Washington, 0:14:39.040 --> 0:14:43.360 d C. Brandon, isn't likely that the Dakota Access Pipelines 0:14:43.520 --> 0:14:48.360 owners could overturn this refusal in short order. In other words, 0:14:48.480 --> 0:14:50.400 how big is the hurdle for them to now move 0:14:50.480 --> 0:14:54.440 forward with this project? Well, it's their pathways have changed 0:14:54.440 --> 0:14:56.040 a little bit. Now they're kind of down to two. 0:14:56.360 --> 0:14:59.400 So they've got one in the courtroom, which has been 0:14:59.480 --> 0:15:03.800 ongoing since the tribes actually sued Army Corps earlier in 0:15:03.880 --> 0:15:07.040 the year, and that continues. There's a status conference coming 0:15:07.160 --> 0:15:09.360 up at the end of this week. They also have 0:15:09.440 --> 0:15:14.480 the opportunity, potentially, if President elect Trump wants to reverse 0:15:14.560 --> 0:15:16.760 the decision on the Army Corps, for him to influence 0:15:17.200 --> 0:15:20.200 that decision and revisit that once he's in office. Now, 0:15:20.320 --> 0:15:23.400 let's just set this scene here. This is bachan shale 0:15:23.600 --> 0:15:27.680 oil that is going or the plan is to pipe 0:15:27.720 --> 0:15:33.800 it underneath the Mississippi River. Correct, that's okay, And there 0:15:33.840 --> 0:15:38.560 are already pipelines underneath the Mississippi River in the vicinity 0:15:38.600 --> 0:15:42.000 of where they have cited this Dakota pipeline. That's right. 0:15:42.040 --> 0:15:44.760 They'd be running parallel to an existing natural gas pipeline. 0:15:44.880 --> 0:15:47.200 So if it would be running in parallel to an 0:15:47.280 --> 0:15:51.920 existing natural gas pipeline, why has this become such a 0:15:51.960 --> 0:15:54.400 big issue? As am I I was just reading, by 0:15:54.440 --> 0:15:57.400 the way, op ed piece in the Walster Journal by 0:15:57.880 --> 0:16:03.200 the Congressman Cramer Kevin Kramer of he's a Republican from 0:16:03.280 --> 0:16:07.400 North Dakota. He says it doesn't even touch tribal land. 0:16:08.080 --> 0:16:10.240 That's right. It's so there are a lot of different 0:16:10.360 --> 0:16:13.000 conceptions flowing out there, and and a lot of them 0:16:13.040 --> 0:16:17.320 are misconceptions. So the threat here from crude is different 0:16:17.360 --> 0:16:19.560 than what you would have from natural gas if it 0:16:19.640 --> 0:16:21.720 were to leak out of a pipeline, because natural gas 0:16:21.760 --> 0:16:26.320 dissipates relatively quickly when it hits water. So, um, this 0:16:26.560 --> 0:16:29.560 is all about water worries and those who are downstream 0:16:29.760 --> 0:16:33.520 of this pipeline crossing, which would be the Standing Rock 0:16:33.600 --> 0:16:36.960 tribe and others. Um, So what what is this dispute 0:16:37.000 --> 0:16:40.560 really about? Well, it depends whether you're on the ground 0:16:40.600 --> 0:16:43.920 with the protesters and sort of the more celebrity aspect 0:16:44.080 --> 0:16:46.680 with the public, or if you're in the courtroom, because 0:16:46.680 --> 0:16:48.840 I think once it boils down to the legal fight 0:16:49.080 --> 0:16:52.440 is this is whether the tribe actually can come in 0:16:52.560 --> 0:16:54.720 and assert some of these issues in front of a 0:16:54.800 --> 0:16:58.000 court when it's not actually crossing their land, and to 0:16:58.160 --> 0:17:02.360 what extent Army Corps has authority to move the pieces 0:17:02.400 --> 0:17:05.200 around once it appears that they've already made their decisions. So, 0:17:05.200 --> 0:17:07.159 in other words, do they have standing? Do they have 0:17:07.200 --> 0:17:09.879 standing to even block this well? And then and do 0:17:10.000 --> 0:17:13.680 they have the kind of claims without the crew actually 0:17:13.800 --> 0:17:16.359 leaking to come in and ask the court to do 0:17:16.480 --> 0:17:19.000 something right to forestall something that may or may not 0:17:19.160 --> 0:17:22.879 happen in the future exactly. The question then to you 0:17:23.200 --> 0:17:27.840 is do they already have other legal actions against the 0:17:28.080 --> 0:17:34.040 pipeline operators because that are already upstream from that water supply, 0:17:34.240 --> 0:17:38.000 Because it seems as though you've got refined product, as 0:17:38.040 --> 0:17:41.399 you said, gas transmission lines and so on. Isn't that 0:17:41.480 --> 0:17:45.440 all upstream of the water. Yes, certainly they've and there 0:17:45.480 --> 0:17:48.680 have been fights over water and water withdrawals in the 0:17:48.800 --> 0:17:52.119 past related to to these reservations, to these reservations and 0:17:52.240 --> 0:17:55.400 these tribes. But this UM, you know, this is sort 0:17:55.440 --> 0:17:58.879 of the first concerned effort we've seen from UM from 0:17:58.920 --> 0:18:00.600 one of the tribes in the Middle West and in 0:18:00.680 --> 0:18:03.439 that area where most of the opposition we've seen has 0:18:03.480 --> 0:18:07.040 come out of the northeast. Interesting. So, just based on 0:18:07.320 --> 0:18:11.400 the legal issues standing UM, what do legal experts give 0:18:11.440 --> 0:18:13.560 as far as the chances that this will keep going 0:18:13.640 --> 0:18:16.600 through and it will be a reality. Well, if we're 0:18:16.600 --> 0:18:20.520 talking about just the courts, UM E. T p UH 0:18:20.720 --> 0:18:23.440 and and Dakota Access the project have filed a motion 0:18:23.520 --> 0:18:25.520 for summery in judgment, which is basically emotion and the 0:18:25.600 --> 0:18:30.640 case on just the legal aspects of it. And they 0:18:30.800 --> 0:18:33.960 have a pretty good argument that Army Corps has in 0:18:34.040 --> 0:18:37.560 effect constructively already issued this easement based on everything they've 0:18:37.560 --> 0:18:40.720 already said and the decisions they've reached on other permits 0:18:41.520 --> 0:18:43.920 um And so I think that the odds right now 0:18:44.080 --> 0:18:46.520 favorite et P and the and the project in the courts. 0:18:47.080 --> 0:18:50.400 Brendan Barnes, thank you very much as senior litigation analyst 0:18:50.520 --> 0:19:06.080 for Bloomberg Intelligence. All Right, when we want results when 0:19:06.119 --> 0:19:10.080 it comes to technology and the confluence of money and technology, 0:19:10.160 --> 0:19:14.040 we turn. We turned to Shira ov Day and she 0:19:14.200 --> 0:19:17.040 is our Bloomberg Gadfly columnist and joins us now in studio. 0:19:17.280 --> 0:19:19.400 Great to see you as always here. Thanks for being here. 0:19:19.800 --> 0:19:21.560 I want you to just dial back the news cycle 0:19:21.640 --> 0:19:23.840 for just a moment and tell us what you believe 0:19:24.000 --> 0:19:28.280 or what we know about a meeting between President elect 0:19:28.320 --> 0:19:31.959 Donald Trump and mash Yoshi San who is the founder 0:19:32.080 --> 0:19:34.800 of soft Bank, which happens to also I believe, be 0:19:34.880 --> 0:19:38.600 the majority show shareholder controlling interest in Sprint. That's right, 0:19:38.640 --> 0:19:41.440 So the two met yesterday and Trump Tower during this 0:19:41.560 --> 0:19:46.000 you know, endless series of Trump e meetings and afterwards, 0:19:46.400 --> 0:19:52.000 Donald Trump tweeted that Muscle Son committed to investing fifty 0:19:52.040 --> 0:19:56.479 billion dollars in the United States and to creating fifty 0:19:56.600 --> 0:20:02.280 thousand jobs in this country. Did massa Son edify or 0:20:02.520 --> 0:20:08.960 or sort of confirm President Elected Trump's tweets? So, like 0:20:09.200 --> 0:20:13.160 most political policy statements given in a hundred and forty 0:20:13.280 --> 0:20:17.239 character bursts, uh, this one from Donald Trump has um 0:20:17.600 --> 0:20:20.480 lots of bogus elements. So let's take the fifty billion 0:20:20.520 --> 0:20:24.480 dollar number first. So massa Son confirmed later that the 0:20:24.560 --> 0:20:29.760 fifty billion dollar figure was basically a reference to a 0:20:30.000 --> 0:20:33.960 pre existing announcement that they he and others made in 0:20:34.400 --> 0:20:38.200 earlier this fall about a hundred billion dollar investment fund 0:20:38.680 --> 0:20:42.159 in startups around the world includes money from Saudi Arabia. 0:20:42.200 --> 0:20:44.359 For correct, includes money from Saudi Arabia. In fact, the 0:20:44.400 --> 0:20:47.359 majority of money and that fund is not from soft 0:20:47.400 --> 0:20:51.159 Bank itself, but from Saudi Arabia and others. So the 0:20:51.240 --> 0:20:55.240 fifty billion figure seems merely to be confirming that they'll 0:20:55.280 --> 0:20:58.480 spend half or so of that hundred billion dollar fund 0:20:58.720 --> 0:21:02.119 in the United States, which natural given the prevalence of 0:21:02.280 --> 0:21:04.520 the tech industry here in the U. Okay, but I 0:21:04.560 --> 0:21:06.920 mean it is true or or it is at least 0:21:07.040 --> 0:21:10.320 possible in the way that possibly it is possibly it 0:21:10.440 --> 0:21:13.400 is possibly true, yes, which is you know, not not nothing, 0:21:13.520 --> 0:21:17.240 although again I don't know that Trump can claim credit 0:21:17.320 --> 0:21:21.919 for that. Fifty is correct. Well, Talking just more broadly 0:21:21.960 --> 0:21:26.120 about President elect Trump's engagement with the tech industry, He's 0:21:26.160 --> 0:21:29.919 holding a meeting with a lot of tech executives. Um, 0:21:30.040 --> 0:21:33.080 are we getting any hints of what different sides are 0:21:33.119 --> 0:21:36.439 hoping will come of that? It should be very interesting 0:21:36.520 --> 0:21:39.439 to see what happens when the tech community and Trump 0:21:39.600 --> 0:21:42.440 get together. This is a technology as an industry that 0:21:43.400 --> 0:21:47.959 maybe more than any other, was horrified by the election 0:21:48.040 --> 0:21:51.200 of Donald Trump. You know, they sort of felt both 0:21:51.400 --> 0:21:55.760 politically and culturally that Trump does not stand for what 0:21:56.160 --> 0:21:58.800 they believe The tech industry stands for. A lot of 0:21:58.880 --> 0:22:05.160 them a posed Trump's campaign publicly with their checkbooks also, 0:22:05.720 --> 0:22:10.320 so it'll really be interesting public in his support of 0:22:11.000 --> 0:22:14.040 former Secretary of State Hillary Clintons, as I recall, I 0:22:14.119 --> 0:22:15.760 want to just get thoughts just a little bit more 0:22:15.840 --> 0:22:19.400 on Sprint, you know, connected with a soft bank Sprint 0:22:19.560 --> 0:22:22.480 shares after that was announced in the tweet, I guess 0:22:22.640 --> 0:22:25.360 up one and a half percent. Uh, Now you've got 0:22:25.760 --> 0:22:30.120 the shares are up about six percent, So clearly somebody 0:22:30.320 --> 0:22:33.600 believes that there is a value in having the ear 0:22:33.680 --> 0:22:36.160 of the president elect. That's exactly right. So the issue 0:22:36.200 --> 0:22:39.200 here is that Muscleson has made no secret of his 0:22:39.359 --> 0:22:44.240 desire to merge Sprint with T Mobile to mobile companies 0:22:44.560 --> 0:22:47.120 that under the Obama administration that has not been possible 0:22:47.160 --> 0:22:49.960 for regulatory reasons. So the hopes are that with this 0:22:50.119 --> 0:22:54.320 new administration in Washington soon can finally make that merger, 0:22:54.640 --> 0:22:58.000 which would probably lead to significant savings at Sprint um 0:22:58.080 --> 0:23:01.200 ironically probably via I think in job losses, and it 0:23:01.240 --> 0:23:05.000 would be something based maybe on your reporting that John Ledger, 0:23:05.040 --> 0:23:09.840 the chief executive T Mobile, has already entertained let's say, Yeah, 0:23:10.080 --> 0:23:13.040 I think probably there's desire on the part of both 0:23:13.160 --> 0:23:16.320 Sprint and T Mobile to do that merger if regulators 0:23:16.400 --> 0:23:19.080 would allow it. That's just so fascinating and would would 0:23:19.200 --> 0:23:21.480 would President elect Trump, you know, latterly be able to 0:23:21.560 --> 0:23:24.199 sort of see that thing through. Yeah, I mean, it's 0:23:24.240 --> 0:23:26.160 hard to know, right, These are decisions that are made 0:23:26.200 --> 0:23:30.440